U-2 human osteosarcoma cells secrete a 29/32/34 kilodalton (kDa) insulin-like growth factor binding protein (IGFBP) identified as O-glycosylated IGFBP-5. Treatment of U-2 cells with IGF-I markedly increased medium levels of IGFBP-5 in a concentration- and time-dependent manner; other skeletal regulatory factors (GH, insulin, PTH, dexamethasone, beta-estradiol, 1,25-dihydroxyvitamin D3, transforming growth factor-beta) had no effect. IGF-I increased IGFBP-5 levels in the culture medium 10-fold without influencing IGFBP-5 messenger RNA abundance. IGF-I, IGF-II, and the IGF-I analog [1-27Gly(4)38-70] IGF-I bound IGFBP-5 with high affinity and, when added to U-2 cultures, effectively promoted IGFBP-5 accumulation in the medium. On the other hand, des(1-3)IGF-I and [QAYL]IGF-I, IGF-I analogs that did not bind IGFBP-5, failed to elicit an increase in medium IGFBP-5. Cell-free incubation of recombinant human (rh) IGFBP-5 in U-2 conditioned medium resulted in a marked reduction of detectable rhIGFBP-5; the presence of IGF-I or IGF-II peptide partially prevented this decrease. By immunoblot analysis, loss of intact rhIGFBP-5 (29-kDa unreduced, 34-kDa reduced) coincided with the appearance of a 16-kDa proteolytic fragment. U-2 conditioned medium contained immunoreactive IGFBP-5 at 29-34-kDa, 20-kDa, 17-kDa, and 16-kDa. Endogenous IGFBP-5 inhibited IGF-I but not des(1-3)IGF-I-stimulated U-2 cell proliferation. In conclusion, IGF peptides can regulate the availability of IGFBP-5 in osteoblast-like cells by impeding IGFBP-5 proteolysis. The biological consequence of increased medium IGFBP-5 appears to be decreased cell responsiveness to IGF-I stimulation.